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Financial Directives

You can prepare a durable power of attorney for finances giving your agent the right to manage your assets when you can’t. However, some organizations don’t recognize a durable power of attorney as authority to act on your behalf. You must complete another form authorizing a designated agent to manage these assets on your behalf.

Make sure the agent you named in your durable power of attorney for finances has the right to complete these forms for you.

Social Security

Q. How can you give someone the right to manage your social security benefits?

A. Treasury department regulations do not permit a power of attorney or a durable power of attorney to be used to manage your social security benefits. A family member or other person must complete a Social Security Representative Payee form designating a “representative payee” to act on your behalf regarding social security benefits.

Social Security will then send your social security benefits to the representative payee. The representative payee is required to prepare and file an annual report describing how they spent the money on your behalf.

The representative payee is also obligated to report any change in circumstances impacting your eligibility to receive social security benefits.

Brokerage Accounts

Q. How will your attorney-in-fact be able to manage your brokerage accounts?

A. Brokerage accounts have special rules for your attorney-in-fact. If your attorney-in-fact needs to buy or sell stocks held in physical form or held in a brokerage account, your attorney-in-fact will need to add a medallion signature “guarantee” to their power of attorney form. The medallion signature is a stamp provided by a financial institution guaranteeing to a transfer agent that the signature of your attorney-in-fact is actually their signature.

Requests to buy or sell stocks are reviewed by someone referred to as a Transfer Agent. The Transfer Agent cannot authorize transactions requested by your attorney-in-fact without the medallion signature guarantee evident on the power of attorney form.

Your attorney-in-fact may need to locate a bank participating in the medallion signature program. The bank should be one the attorney-in-fact does business with that is willing to guarantee its signature. The bank will place the medallion stamp on the power of attorney form.

Safe Deposit Box

Q. How will your attorney-in-fact get access to your safe deposit box?

A. If you open a safe deposit box in the name of your trust, the trustee or successor trustee has the legal right to access the safe deposit box.

When you open a safe deposit box in your name, or as a joint tenant, ask whether your bank will accept your power of attorney as authorization for your attorney-in¬fact to access your safe deposit box. Some banks will not. These banks may require you to complete a separate form they provide designating a safe deposit box agent. The box renters will complete the form naming a safe deposit box agent in the presence of a bank employee, which gives the bank greater assurance about the validity of the authorization.

Banks and other financial institutions struggle with accepting your power of attorney. Currently, there is no way for banks to know if you have revoked your power of attorney or changed the name of your attorney-in-fact.